Tax change gives N.W.T. MLAs another reason to account for coveted expense allowance
If they don’t start accounting for it to taxpayers, they will have to account to Canada Revenue Agency
This year, Northwest Territories MLAs have some extra incentive to become more accountable for a controversial expense allowance they've guarded for years — and if they don't, the Canada Revenue Agency is going to take a share of it.
It's called the expenses and entertainment allowance. Yellowknife MLAs get a total of $7,484 annually. MLAs who live outside of Yellowknife get double that. Additionally, the speaker and cabinet ministers get another $1,500. No receipts are required. It's simply paid out to each MLA monthly.
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The expense is meant to cover meals, transportation and other incidental expenses incurred as a member of the Legislative Assembly, as part of an array of expenses and benefits every MLA is entitled to receiving.
Independent reviews of MLA compensation have repeatedly recommended that they start providing receipts for the allowance, but MLAs have steadfastly disregarded the recommendations.
The report on the latest review, released earlier this month, points out that the Canada Revenue Agency has decided that all allowances MLAs collect without providing receipts are going to be taxed as income starting Jan. 1.
"It is now important to find the best option possible to minimize the impact of these allowances becoming taxable on members' indemnities," the commission that conducted the review stated.
"It was determined that a zero-impact approach to the change coming into effect by the Canada Revenue Agency is to make the allowance an accountable allowance."
If MLAs again refuse to account for the allowance, they will be taxed an additional $2,600 to $5,200 annually.
The commissioners said even if the tax rules were not changing, they "may have" still recommended MLAs account for their use of the allowance. The previous two reviews have recommended making the allowance accountable.
Other changes recommended
The commission does not recommend any salary increases for MLAs. Though they preside over one of the smallest populations in the country, their base salary of $103,851 is among the highest in the country. The commission recommended annual cost-of-living increases or the same increases given to unionized employees, whichever is less.
It also recommends that an "exit strategy" be developed to help ease the transition to private life for MLAs who fail to get re-elected or who chose not to seek re-election. Part of that would be allowing them to continue accessing the employee and family assistance program for a year after they leave government.
"They have to learn how to restructure their time, potentially find a new career, or return to a previous one," reasoned the commission.
"They also have to come to terms of their loss of 'being needed'; there is a feeling of no longer mattering to others in the same way. It was reported in the research that some struggled to find employment."
[MLAs] have to learn how to restructure their time, potentially find a new career, or return to a previous one.- Commissioners
Along the same lines, the commission recommends that taxpayers pick up the bill for two courses — "Successful Transition to Retirement" and "Planning for Retirement" — to help MLAs who are leaving government.
Non-returning MLAs can claim up to $10,000 for retraining, education or to help to start up a new business.
The report also recommends doubling the additional pay for the chair of the Standing Committee on Rules and Procedures. Because it met less often than other standing committees, the chair collected only half the pay of other committee chairs. The commission says because the committee has become busier, the chair should collect the full annual amount of $6,296.
The rules and procedures committee had 13 meetings last year and has met twice so far this year. None of those meetings have been open to the public, according to figures provided by the Legislative Assembly.
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The commission also recommends that regular MLAs be given the same level of health-care coverage as cabinet ministers. Regular MLAs are currently covered by the Public Service Health Care Plan but don't receive the same level of coverage as cabinet ministers or senior managers. The plan covers additional costs of health care not covered by the N.W.T. health-care plan.
The commission reasons it's unfair for cabinet ministers, who get paid more than regular members, to get additional coverage. It said if regular MLAs' coverage is not increased, cabinet ministers should be brought down to the level provided to the regular members.
The commission is also recommending that taxpayers cover the cost of health and dental coverage for MLAs' constituency assistants when the assistants do not have coverage.
The Legislative Assembly said there's no way of saying when MLAs will be discussing the review. One MLA said it will be discussed on Tuesday morning, during one of the regular closed meetings MLAs hold before each day of session.